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CONTRACT VS PERMANENT

Wednesday 10th October 2018

I work the Java Developer contract market here at Amsource Technology and one of the most common things I get from hiring managers on a daily basis is that ‘we don’t do contractors; their rates are too high’. 

Although these are the benefits you get from hiring a contractor it doesn’t necessarily mean that perm staff do not come with any of them. Perm staff are also often highly skilled in their area and are highly efficient but if you want to start a new project straight away that may require new skills to be added to the team then you may be stuck with the cost of either upskilling or a lengthy recruitment process which will also cost time and delay the start date of the project.

Perm staff can also be highly efficient but a factor that has to be added in when considering who to hire is the days lost in productivity. If a contractor is absent or takes annual leave then they will not be getting paid ‘get quote from contractor about why they don’t take time off’ which often motivates them be highly efficient in their work to get the job done whereas with a perm member of staff you are looking at an average of 40 days lost productivity due to absence and holiday days. 

After looking at the benefits of both types of employment it’s now time to break down the cost. 

For a perm member of staff, the costs are as follows: 

1. Basic Salary: £60,000
2. Employer NIC: £7,117
3. Benefits: £7000
4. Recruitment: £12,000
5. Employee operating costs: £10,500

For a contractor the costs are as follows: 
1. Daily rate: £500

All the costs of a perm member of staff accumulate to a total of £96,617 and when you divide that by 44 weeks’ worth of work it works out at £439pd. 

A contractor comes with all the benefits with zero days of productivity lost, highly skilled in their area, no upskilling, no operating costs and are on board the team within days for a price of £500pd so realistically the price difference is significantly smaller than you would think but the benefits are incredibly higher. 


Get in contact with Will for Advice on your next Contract. Will specialises in the recruitment of Java Contractors but is happy to advise other contractors specialising in different areas on their next contract, as well as hiring managers looking to expand their tech teams with contract workers.

Call: 0113 468 6700
Email: Will@amsourcetechnology.com
Connect on Linkedin


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